HEALTH CARE ACT

Health Care Act

Health Care Act

It has been two years now since the Patient Protection and Affordable Care Act (H.R. 3590) came to be passed by the congress. The impact of this healthcare act significantly changed the health care being provided all across the United Sates. However, what many people failed take into account are the financial implications associated with this act. No doubt many of the provisions entailed in this act are attractive and seem to put America on the path to advance development. Without any prejudice to the positive impact of this Act, several financial implications do need to be taken into account. This is especially true when you consider the different taxes that would be going into effect along with this Act. There are many significant tax implications inside this Act. The House has also passed the Reconciliation Act of 2010 (HR 4872) which includes many more tax provisions. Some of the major significant provisions that have been included into this act are as follows which highlight the financial impact of the Health care Act.

Small Business Tax Credit

Businesses that have twenty-five or less than twenty-five employees with an average yearly wages of forty thousand dollars or less will now be eligible for credits of up to 50% of non-elective contributions that the company has made for its employees for the purpose of insurance premiums. Those businesses which will be availing this credit will be receiving a credit of thirty-five percent on payroll taxes (http://www.journalofaccountancy.com).

On the other hand, companies those have ten or less than ten employees with their average wages being less than twenty thousand dollars will be receiving credit of up to 100 percent. It will be phased out slowly until the business manages twenty five employees.

Excise Tax on Individuals who are uninsured

Citizens and residents of America are required keeping a minimum amount of coverage for health insurance. If residents do not meet this requirement, then they will be made to pay an adult excise tax of $750. This will be levied on each adult and would consist of half the amount for a child. However, this tax would not be exceeding 300 percent of the tax on adult per household. The phasing of this penalty will commence in 2014 and will be phased out till 2016. This penalty will also be subjected to inflation. Those who do not pay these penalties will find themselves facing criminal penalties.

An extent of the financial implications which this new healthcare Act has on the people can be gauged by these costs that will have to be borne by the citizens (http://www.journalofaccountancy.com).

Reporting Requirements

This requirement imposes on the employers the responsibility of providing a minimum insurance coverage to their employees. They would then be reporting this coverage to both the IRS and the individual who has been covered. This requirement will also be binding on those individuals who are self employed (http://www.journalofaccountancy.com).

Medical Care Itemized Deduction Threshold

This will go into effect on the last day of the current ...